With the new URLA behind us…along comes the next major change in residential lending.
Fannie Mae and Freddie Mac (aka the GSEs) have provided an update on the new URAR. Yes, the Uniform Residential Appraisal Report is undergoing some major changes. Here are just a few highlights:
Input was gathered from 107 stakeholders across the industry in designing the new form. The key benefits of the new form are:
- Dynamic output with commentary placed within each topic
- Standardized data that allows appraisers to better define the property, providing a more holistic view and greater understanding of the property characteristics
- Flexibility, allowing the URAR to be easily adapted to address future industry-wide needs
There were three phases of research. According to the report:
- Phase 1 included exploratory qualitative research conducted by the GSEs through interviews among lenders, appraisers, and others in the industry to understand perceptions of the Legacy Form
- Phase 2 was a quantitative survey to validate findings from Phase 1 and to obtain feedback on proposed changes to the Legacy Form
- Phase 3 was additional qualitative research in a Virtual Bulletin Board (VBB) setting used to capture feedback among key end-users on a new URAR and understand how well the revised report would meet stakeholders’ needs in terms of content and format
The form is totally different from the current URAR and it appears the form is still in DRAFT status.
Also happening: Effective April 1, 2022 appraisers will be required to use the “Square Footage-Method for Calculating.” according to the American Nationals Standards Institute®. (ANSI) Until now, The GSEs did not require the use of a specific measurement.
“All footprint sketches and floor plans must be computer-generated (not hand-drawn), indicate all the dimensions needed to calculate the GLA and other required areas such as garage and basement, and show the calculations to demonstrate how the estimate for gross living area was derived.”
Why the change? Many appraisals are completed with heavy emphasis on gross living area. Creating a standard for measuring, calculating and reporting square footage will create consistency across the market, provide a defensible method for appraisers and allow transparent results for the end users.
Currently, GLA for properties in local MLS systems and assessor records man NOT be ANSI compliant.
FAQs can be accessed here.
Realtors should just love this…and what about the cost of appraisals and the time to complete? Time will tell.
Contact: Deb Killian firstname.lastname@example.org 866-256-3766 Visit us at: cloes.online